How to Determine What Your Asking Salary Should Be

A woman looking up at money falling from the sky.

Best-selling author Martin Yate, a career coach and former HR professional, takes your questions each week about how to further your career in HR. Contact him at the e-mail address at the end of this column.

I'm making a strategic career move. During an interview for a new position, I could tell they were going to offer me the job. Then they asked me how much money I wanted. When I gave them my response, they said that figure was too much and ended the interview. How should I have handled this?

You went too high and lost out. But if they had immediately accepted the dollar amount you gave them, then you'd regret selling yourself short. This dilemma calls for some thought and intelligent strategy to avoid potential pitfalls while maximizing your options.

Generally, when an interviewer raises the question of money, it means that the offer is yours to lose. Here's a three-part question to help you determine your optimal asking salary:

Considering your skills, experience and location, what is the lowest salary you would accept? We are assuming that the job is the right opportunity, helps you advance toward long-term goals and is with a desirable company. In this context, "lowest" means the amount of money that will keep food on the table and a roof over your head. You never mention this number to anyone, but you need to know it for an exceptional circumstance that we'll come to shortly.
What would you consider a fair offer, given your skills, experience, the company you are interviewing with, the job opportunities and location?
What is the best possible salary you can imagine, given the same considerations of skills, experience, opportunity, company and location?

At the end of this process, you've got three dollar amounts:

A minimum salary.
A midpoint salary.
A dream salary.

Drop the lowest figure, and you are left with two numbers that define a salary range for you, just as employers have an approved salary range for each job. Don't forget to factor in the value of any benefits the employer may offer.

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Now, when interviewers ask about salary requirements, you can reply not with a single dollar figure but with your salary range: "Given my relevant skills and strengths (list them here), and considering the benefits are reasonable (if you believe that they are), I'm looking for somewhere between $X and $Y. How does this fit with your salary range for the position?"

So instead of nailing yourself to the floor with a single figure, you dramatically improve the odds of aligning with the employer's approved range for the job and reduce the odds of either lowballing your offer or pricing yourself out of consideration. You also finish with a question that encourages agreement and often generates useful information in the reply.

The Exception

Now for that one exception that I alluded to earlier—when you have to propose your absolute minimum salary. Sometimes, a smart strategic career move that takes you toward your longer-term goals can require stepping sideways or even backward to gain skills and experience needed for your career aspirations, and that can mean taking a lower salary than you'd like.

The most important job change in my life required me to take a 50 percent pay cut, but it was one of the smartest decisions I ever made. It changed my career direction and put me firmly on the path heading toward my long-term career goals. Only by knowing that lowest figure in advance could I make the move that changed my life completely and forever.

Intelligent career management is similar to playing chess, a game of strategy that requires you to understand the rules of play and think ahead three to seven moves. Applying this strategic thinking to your professional life can help you evaluate which job offer can be most beneficial to your professional goals years down the road—and it isn't always the offer with the highest salary.